- Image by TheTruthAbout…via Flickr
Undisclosed payments in a short sale transaction, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud and licensing laws.
This is starting to happen with second lien holders and may constitute loan fraud which is punishable by 30 years imprisonment and a $1 million dollar fine. Depending on the specific circumstances, carrying out these payment requests also may violate other laws and regulations and an agent’s participation may be subject to license revocation by the Department of Real Estate or other disciplinary action.
Agents and their clients are encouraged to file complaints regarding fraudulent activities to the proper authorities.